The Italian government's resolve to create a more flexible labor market is coming under increasing resistance from the nation's traditionally powerful labor unions, threatening to unleash the worst labor trouble in decades and challenging the government of Prime Minister Silvio Berlusconi.
The central issue is competitiveness. Berlusconi emerged victorious from national elections last year pledging to overhaul labor laws to help Italy match bigger neighbors like Germany and France in giving businesses greater flexibility, increasing competitiveness and creating jobs.
In January, unemployment in Italy fell to 9.1 percent, its lowest level in a decade, despite the global slowdown. But while productive regions like the northeast suffer labor shortages, the south of the country has pockets of unemployment as high as 16 percent.
But the government's resolve to push through change has been taken by the unions as a declaration of war. Indeed, Berlusconi, a television magnate-turned-politician, likens the changes he envisages in the state's role in the Italian economy to the ideas of Ronald Reagan and Margaret Thatcher, who attacked the entrenched power of labor.
Berlusconi's goals not only overturn Italian traditions of consensual government and labor's strong influence in the running of the country. They also buck the trend among Italy's closest neighbors, notably Germany and France, where labor unions, though weak in actual membership, are powerful participants in social decisions.
Recently, his efforts were complicated by the assassination of Marco Biagi, a labor law expert and principal architect of the government's proposed legislation. Biagi was shot to death earlier this month by an offshoot of the Red Brigades terrorist group, but his death led to a collapse of relations between labor and government after two cabinet ministers suggested that his killing, morally at least, was the result of labor intransigence.
The remarks came after mass rallies organized by the labor unions on Saturday that brought out two million people.
Antonio Martino, the defense minister, accused union members of "supporting the logic of Biagi's assassins without being aware of it. Martino added that that reform of the labor market "constitutes a betrayal of rights of workers."
Umberto Bossi, the mercurial deputy prime minister, went further, suggesting complicity between union leaders and terrorists. "First they killed him, now they are appropriating to themselves the victim," Bossi said.
Enraged, union leaders canceled talks set for Tuesday with the government and staged more rallies on Wednesday. Tens of thousands of demonstrators marched across Italy, including more than 100,000 in Rome, to denounce the suggested link between labor and terror.
The show of labor force, in part at least, has been a result of the weakness of the political opposition, which has been divided and lackluster since its defeat in last year's elections. That weakness has thrust to the forefront Sergio Cofferati, the leader of CGIL, the formerly Communist union that is Italy's largest. Indeed, Italian newspapers were calling Cofferati the "anti-premier" in their editions Thursday, painting him as the main opponent to Berlusconi.
As an ultimate show of force, Cofferati has called for a general strike on April 16.